Posted on March 10, 2022 in Lifestyle

Financial steps for a stress-free retirement

With the steadily growing ageing population and rising age for pension qualification, Australians and New Zealanders are realising that they need to take proactive steps towards securing their financial future.

To help ensure you are prepared for retirement, no matter what age you are planning to retire, property investment consultancy Dream Design Property shares its expert advice: 

Eliminate consumer debt

Credit card debt is not cost-effective, therefore paying off your highest interest balances first is a smart move. One then has the ability to use the money freed up as each card gets paid off — to accelerate the payoff of the remaining cards. This means you’ll be debt-free much quicker. 

Knowing that one investment is not enough to retire on, and the earlier you start the better

Focusing on property investing as an example, to retire on a $100,000 per annum passive income, you would need 10 properties each with a purchase price of $300,000, receiving $350 per week per property for a minimum of 10 years before you achieved this level of financial stability.

Typical advice is to aim to replace 70-90 per cent of your annual income. This is assuming you own your own home. With people statistically breaking into the property market later these days, it pays to have a sound investment strategy that will provide you with the ability to invest and purchase your own home.

With only a small percentage of Australians and New Zealanders owning some sort of investment property, and an even smaller number owning six or more properties, the thought of 10 investment properties could be daunting. However, with the help of market professionals, building a multiple property portfolio is achievable and will greatly enhance the security of one’s retirement. 

Add to your portfolio yearly (or as often as is financially achievable) and know that financial rewards may not be instant — rather, reaping the benefits over the long term, in time for retirement. 

Capitalise on what you could be earning money from

Is there an extra space in your house or office that can be rented out for additional income? Assessing your property for any small changes that could translate to significant profit is an effective way to improve your bank balance quickly. 

Invest your pay rise

With every pay increase, it is tempting to also give your lifestyle a promotion. Many people increase expenses each time their income rises.

However, a trend with smart investors is to control their spending. Putting aside one’s raises and/or bonuses directly into a high-interest account can be an easy and efficient way to control spending. Every dollar saved is a dollar earned. After all, you’re only as wealthy as your saving or investment abilities allow. 

Ensure that your insurance is in place for financial protection

Financial protection is essential when it comes to investing. Unfortunately, we hear of career-ending accidents all too often and those who have mortgages are often left high and dry. Arranging the right insurance policy can protect up to 80 per cent of your income in the event that you lose the ability to work.

Speaking to a financial advisor to set up income, disability, life and trauma insurance is the only way to safeguard yourself, your portfolio and your retirement fund. 

(Source: Dream Design Property)